Loading
Coffee Talk
+ Gulf Coast investor
bets big on Applebee's
Burton "Skip" Sack must really have a thing for Applebee's, the casual dining restaurant chain.
And Sack's passion isn't over the mini-burgers or chicken fingers.
Instead, the part-time Gulf Coast resident and retired restaurant industry executive keeps returning to Applebee's from the investor end, buying heavily into shares of the chain's parent company, DineEquity, Inc.
His latest buying binge came only days after Wall Street battered its stock by as much as 25% for a slew of issues, including potential dissension in its executive ranks first reported in the Wall Street Journal. The success of a turnaround project, slowed by the nationwide economic slump, has also been questioned.
Nonetheless, Sack tells Coffee Talk he bought somewhere between 35,000 and 40,000 shares of the company, traded on the NYSE under the symbol DIN, over several days in the middle of September. "The stock has been undervalued," Sack told Coffee Talk Sept. 15, mere minutes after putting in an order for a few thousand shares at $15.32 a piece. (The stock closed the day at $15.31 - it wasn't a victim of the Dow collapse that occurred later that day.)
Sack's pro-Applebee's position isn't merely the musings of a savvy investor and a past president of the National Restaurant Association - both of which apply to Sack, who spends his winters on Longboat Key. Sack also used to own several Applebee's restaurants and was once the parent company's largest shareholder with 2.4 million shares - a 3.2% stake of what was, for a time late last year, a $1.9 billion company. He has also sat on the company's board of directors.
But Sack's relationship with Applebee's soured last year when the company agreed to a nearly $2 billion buyout offer from IHOP Corp., the predecessor to Glendale, Calif.-based DineEquity. It was so sour that Sack sued the company through a rarely used process known as an appraisal proceeding.
Sack's beef: The $22.50 a share price in the Oct. 30 deal significantly and severely undervalued Applebee's long-term potential, despite the fact that it would put $62.1 million in Sack's inbox in the short-term.
Sack settled out of court with the company last month, just in time for him to go back to buying Applebee's shares, now under the DineEquity name. The terms of the settlement are confidential, says Sack, who could only add that he's not leaving the table without a sizeable to-go bag.
"I can't complain," Sack says. "I didn't get as much as I wanted, but it was better than I thought."
+ Local builder's group
close to naming new leader
One of the leading pro-development groups in Sarasota and Manatee Counties, the Gulf Coast Builders Exchange, is getting ready to name its new executive director. The new boss would replace Jay Brady, the longtime GCBE head who was let go last month.
Doug Sutter, the exchange's board chairman, tells Coffee Talk the organization could have an announcement on a new executive director by early next month. So far, says Sutter, the search has resulted in a combination of local players with some heft in the industry to people from across the country. The list includes a doctor and the head of a builder's group in Sacramento, Calif.
"We've been amazed at the group of applicants we've heard from," says Sutter, vice president of Sarasota-based Sutter Roofing. "It has been eclectic."
Meanwhile, the exchange settled on an interim director by calling on Stan Sabuk, head of Bradenton-based Skyline Builders Group, a contracting firm working mostly in the commercial arena in Manatee County. Sabuk founded Skyline in 2002 and has been active on the GCBE board since 2007; he is serving as chair-elect this year.
Sabuk brings an unusual twist to leading the exchange, even if it's only for a short time: He's a registered Democrat, who has supported candidates from that party on a national stage, both in Florida and his native New England. While the exchange is set up as a non-partisan group, in practice it tends to support political candidates with a free-market and pro-growth points of view - a group that tends to be overwhelmingly Republican.
The irony of his political affiliation isn't lost on Sabuk. Still, he tells Coffee Talk that his real allegiance will be to the GCBE, not a political party. "I'm a conservative businessman," Sabuk says. "I support candidates that support my livelihood."
+ Jabil stays in St. Pete,
Lear leaves Tampa
The news of Jabil Circuit deciding to stay in St. Petersburg was welcome news to Pinellas County, which worked with the state to provide more than $20 million in incentives to keep the electronics assembly company, which employs 1,880.
But the news came not too long after another company, Lear Corp., moved 100 jobs from Tampa to Mexico.
Also, ironically, Jabil recently laid off 120 workers, but it says its aerospace business is booming and it hopes to eventually add 850 more employees in the future.
One main difference between these two companies is that Jabil is locally based, while Lear is Southfield, Mich., firm. And Jabil is proposing to build a new corporate headquarters building in St. Petersburg on Gandy Boulevard.
However, if Lear can move jobs for lower costs, and Jabil made noises about leaving, what stops Jabil from trying to leave again? Or from moving some of its operations overseas?
It has been done by other companies in the Tampa Bay area. Only 12,000 of Lear Corp.'s 91,000 worldwide employees work in the United States. Not all of Jabil's employees are in St. Petersburg.
Interesting side note: When Jabil last year explored places to relocate, it didn't mention Mexico, the Southeast, India or China. It was looking at sites in California and Michigan, not states traditionally known for low-cost operations.
+ Quest follows
bike path to new HQ
Quest Corp. of America Inc., an advertising, marketing and public relations firm in Tampa, recently broke ground on its new Pasco County headquarters in Land O' Lakes.
It is making the move in the first quarter of next year because it has outgrown its two facilities in Citrus Park in Tampa. It wants everyone under one roof and the location is convenient for employees.
But there's another reason. The chief executive officer and founder, Sharlene Lairscey, an avid bicyclist, likes the option of taking the Suncoast Trail, a bike path, to work. In fact, the new building will have a shower and changing facility to encourage that.
"I will be taking the bike to work," says Lairscey, who recently did a 500-mile bike trek in Iowa to raise money for charity.
The new office site is a half mile east of the Suncoast Parkway on State Road 54 in Suncoast Meadows. It will be built at a little more than 3,000 square feet.
Quest, with nine regional offices in Florida, was founded in 1995. It has 40 employees throughout Florida. Seventeen will be based in the new office. It caters mainly to government-related clients, such as the Florida Department of Transportation, Tampa International Airport and the Tampa Expressway Authority.
+ Survey: Businesses must
work to regain consumer trust
Bankers and Realtors are among the professions on the wrong end of a new nationwide survey from the Better Business Bureau on how much - or more to the point, how little - consumers trust American companies.
Overall, the survey reported that in a seven-month period, from September 2007 to last April, the trust American consumers have in businesses dropped in 13 of 15 industries, including banking, auto sales and real estate. Just as alarming: Nearly half, 47%, of the respondents, say they have only "some, very little or no trust at all" in companies they do business with in everyday life.
The survey's total index of consumer trust, based on a sampling of 1,200 adult consumers nationwide, was down 14%, the bureau reported. Karen Nalven, the president of the Clearwater branch of the BBB, which serves most of the Gulf Coast, called the survey results troubling.
"This trend should be a call to action for businesses, especially in an ailing economy," Nalven says in a statement. "Businesses need to realize the link between consumer trust and profitability.
The survey asked consumers to mark how much they trust a business using one of six categories: A great deal of trust; quite a lot of trust; some trust; very little trust; no trust; and don't know.
From the first to second survey, nine industries dropped at least 10% in either the "great deal of trust" or the "quite a lot of trust" categories. The industries at the top of that list were auto dealers and real estate brokers, which were down 19% each. And in a true example of kicking an already beaten industry, gas stations were down 15% in those categories.
Meanwhile, another nine industries experienced a greater than 10% increase in the combined "very little trust" and "no trust" categories. Survey leaders in that area were home improvement stores, which were up 33%, and banks, financial institutions and stockbrokers, which were up 30%. Gas stations made an appearance on this list as well, rising 27%.
Not all is lost, however, at least when it comes to small businesses. The bulk of the Gulf Coast business community, almost three-fourths of the survey respondents, said they trusted small businesses more than large corporations, while 67% said they preferred doing business with smaller firms.
+ Branching out from
upscale jewelry to deli
Suzanne Perry has built Jewelry Hauture, a two-year-old custom-made and designer retail jewelry business in South Tampa, selling high-end jewelry to affluent clients.
Her husband, Roger, who raises horses, including one that raced in the Kentucky Derby this year, has helped her build contacts to grow her business.
Now, its Roger Perry's turn to branch out. But the concept is not exactly upscale. Or has anything to do with horses.
It's Datz Delicatessan and Foodie's Market, which will open next month at 2616 S. MacDill Ave. in South Tampa.
It is not your normal deli. Datz will feature 64 sandwiches, 150 kinds of cheeses, 50 specialty beers, 1,700 bottles of wine and 20 kinds of fresh baked breads.
"I know, what a contrast, diamonds and deli!" Suzanne Perry told Coffee Talk.
+ From Neilsen management
to herbal entrepreneur
Deserie Valloreo, a former business information systems professional, gets some interesting looks when she tells her former colleagues what she's doing now.
Valloreo, 40, has become an entrepreneur. She has opened Herbalwise, a St. Petersburg company that offers three-hour training sessions for consumers and businesses in how to use herbs to improve health and performance.
Valloreo had worked with A.C. Neilsen and Home Shopping Network. At Neilsen, she was manager of knowledge management, developing training programs. She began using herbs as a way to improve her health and thought she could share the remedies and herbs with others.
"It's something I always wanted to do," Valloreo told Coffee Talk.
She is offering the $60 seminars on how to make herbal medicines and may expand the workshops to cover herbal use for pets. She has competitors, but they structure their workshops differently.
"People are all interested in being empowered," Valloreo says. "They are fed up with the side effects of medication. People are really frustrated and looking for alternatives."
ECONOMIC SNAPSHOT
JUNE TOURISM & RECREATION
What the data shows: Taxable sales in the tourism and recreation category includes those at hotels, motels, bars, restaurants, liquor stores, photo and art stores, gift shops, admissions, sporting goods, rentals and jewelry stores.
What it means: Florida's Gulf Coast is suffering larger percentage declines in tourism-related sales than the state as a whole, June figures show. This may be due in part to the fact that the Midwest feeder markets are in weak economic shape. Gulf Coast airports are reporting fewer passengers and European tourists have not picked up the slack. The Tampa Bay region appears to be holding up better than other areas of the Gulf Coast, probably due in part to the wider variety of tourist activities and choices.
Forecast: A weakening economy, combined with a decline in the stock market, has already started to show up in declining airport traffic numbers. What's more, Europeans are beginning to experience economic weakness, which may limit their ability to spend on travel to the U.S. despite a relatively strong euro currency. On the bright side, Florida vacations are more affordable given the cost of international airfares.
taxable sales ($ in millions)
Area June taxable sales %Annual chg.
Fort Myers $149.3 ‑6.5%
Naples $90.1 ‑6.5%
Punta Gorda $24 ‑8.7%
Sarasota $145 ‑7.6%
Tampa $598.6 ‑1.7%
Florida $5,478.4 1.2%
Source: Florida Legislature Office of Economic & Demographic Research
Tampa area sees foreclosure dip
The foreclosure fever broke a bit in the Tampa Bay region as the number of homes in foreclosure dropped 10% in August from the same month a year ago, according to RealtyTrac.
Pasco County saw the largest decline in foreclosed homes with a 37% drop. In the Tampa Bay region, only Pinellas County saw an increase in August compared with August 2007.
Further south, Lee and Collier continued to see triple-digit percentage annual growth in foreclosures in August, though Lee County saw a 3% drop from July numbers. Sarasota and Manatee foreclosures continued to grow at double-digit percentage pace.
August %Annual
Area foreclosures Change
Cape Coral-Fort Myers 5,132 222%
Naples-Marco Island 1,160 214%
Sarasota-Bradenton 1,947 41%
Tampa-St. Petersburg-
Clearwater 5,298 ‑10%
August %Annual
County foreclosures Change
Collier 1,160 214%
Hernando 422 ‑7%
Hillsborough 1,895 ‑19%
Lee 5,132 222%
Manatee 916 62%
Pasco 920 ‑37%
Pinellas 2,061 25%
Sarasota 1,031 27%
LETTER TO THE EDITOR
Banking ratio misleading
Editor's note: John O'Neill, president of Century Bank in Sarasota, objects to the Texas ratio for his bank published in the banking issue of the Gulf Coast Business Review Sept. 5. The ratio is a controversial formula for gauging a bank's health that grew out of the savings and loan crisis of the later 1980s.
We would like to point out the inaccuracy of the table that accompanied the "Texas Time" article.
The Texas ratio, developed by Gerard Cassidy of RBC Capital Markets, is defined as "a lender's non-performing loans divided by the sum of its tangible equity capital and loan loss reserves". As of June 30, 2008, Century Bank had $36,200,000 in non-performing loans, $48,691,000 in tangible capital and $12,872,000 in allowance for loan and lease losses. Doing the arithmetic:
Century Bank's true Texas ratio, 58.8%, is close to one-third the published number. These numbers can be confirmed by referring to Century Bank's TFR (Thrift Financial Report) filed for the second quarter of 2008, available in the TFR section of the FDIC website. Tangible capital is computed by subtracting intangible capital of $803,000 (line SC660) from GAAP Capital of $49,494,000 (line SC80) on the Consolidated Statement of Condition. The non-accrual loans can be found on line PD30 of the Consolidated Past Dues and Non-Accrual schedule.
The article also states that Century Bank is one of two banks with Tier 1 risk-based capital less than 8%, "another possible indicator that the bank could be in financial trouble". At 7.36%, Century Bank's Tier 1 risk-based capital is above the "well-capitalized" threshold of 6.0%. The bank also exceeds the Tier 1 core well-capitalized target of 5.0% at 5.46% and the total risk-based well-capitalized target of 10.0% at 10.22%.
Thank you for allowing us the opportunity to respond to the article.
John P. O'Neill
President, Century Bank
Where's the activity?
Here are the Gulf Coast's top communities in each area, ranked by annual new-home starts ending June 2008, according to Metrostudy.
Tampa area
Community Annual starts ending June 2008
South Fork (Hillsborough) 142
Meadow Pointe (Pasco) 134
Fishhawk Ranch (Hillsborough) 133
Cypress Creek (Hillsborough) 124
Watersedge (Pasco) 119
Asbel Estates (Hillsborough) 118
K-Bar Ranch (Hillsborough) 105
Trillium (Hernando) 102
Oak Creek (Hillsborough) 92
Panther Trace (Hillsborough) 89
Sarasota-Bradenton area
Community Annual starts ending June 2008
Rotonda (Charlotte) 151
Heritage Harbour (Manatee) 141
Harrison Ranch (Manatee) 129
Stoneybrook at Venice (Sarasota) 121
Burnt Store (Charlotte) 113
Copperstone (Manatee) 79
Pennington Place (Sarasota) 77
The Country Club (Manatee) 67
Venetian Golf & River Club (Sarasota) 60
Palmer Ranch (Sarasota) 53
Lee and Collier area
Community Annual starts ending June 2008
Ave Maria (Collier) 197
Tuscany Cove (Collier) 141
Bella Terra (Lee) 100
Madison Park (Collier) 87
Verona Walk (Collier) 73
Lely Resort (Collier) 63
Port of the Islands (Collier) 57
Villagewalk Bonita (Lee) 52
Vistas at Heritage Bay (Collier) 46
Bayshore Commons Townhomes (Lee) 42
HMA chief's surprise
resignation
Burke Whitman, the president and chief executive officer of Naples-based hospital chain Health Management Associates, resigned abruptly after barely a year on the job.
Whitman had been hired in June 2007 to turn the company around as it struggled with the rising costs of caring for uninsured patients. The former Marine colonel who served in Iraq had some success, but the company's stock hasn't reflected that. HMA, which operates 56 hospitals mostly in the Southeast, is the fifth-largest company on the Gulf Coast with $4.4 billion in revenues last year.
The announcement of Whitman's resignation occurred Sept. 15, one of the worst days for the stock market in years. Still, HMA's 14% stock decline that day to $4.75 per share was much steeper than the 3% drop experienced by its industry peers as measured by the Dow Jones US Health Care Providers Index. HMA's stock recently was down 20% year-to-date.
HMA says Whitman "has been offered new responsibilities in military service which he intends to pursue." A company spokesman could not be more specific and Whitman couldn't be reached.
Gary Newsome, the president of HMA rival Community Health System, was named to replace him. Newsome is the company's third chief executive in less than two years, but it's a homecoming of sorts. Newsome was HMA's divisional vice president of group operations from 1993 to 1998.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
